The Challenge of Regulating Managed Care

John E. Billi and Gail B. Agrawal, Editors

Publication Year: 2001

Representatives of industry, government, caregivers, and consumers join scholars and policy analysts in comparing market forces to regulation as potential means for righting what is wrong with managed care. The contributors that John E. Billi and Gail B. Agrawal have gathered here quickly move the healthcare debate beyond the classroom, think tank, and statehouse to the boardroom and examining room. Some argue strongly that the solution is to be found in the democratic process and government intervention, while others maintain that only market forces in a competitive environment can respond quickly to the needs of consumers and purchasers alike. The contributors' diverse opinions about the oversight of managed care reflect an enduring divide, one that will affect how society ultimately resolves questions about the inevitable tradeoffs among health-care quality, cost, and access in an environment of limited resources. The Challenge of Regulating Managed Care will appeal to policymakers, those in the medical field, and all readers interested in the American experience with managed care. John E. Billi is Associate Professor of Internal Medicine and Medical Education; Associate Dean for Clinical Affairs, University of Michigan Medical School; and Associate Vice President for Medical Affairs, University of Michigan. Gail B. Agrawal is Associate Professor of Law, University of North Carolina, Chapel Hill.

Contents

Part 1. Understanding the Big Picture

1. Managing the Managers: An Introduction to the Challenge of Overseeing Managed Care

This monograph on the challenge of regulating the managed-care industry has its origins in a health policy forum held at the University of Michigan Medical School. The forum brought together a well-known journalist-author, leaders of organized medicine and the managed-care industry, consumer advocates, and health-care scholars on the faculty at the University of Michigan to discuss...

2. A National Overview

For nearly two decades, the government’s general role in the U.S. economy has been to pull back rather than to intercede. We have embraced deregulation as the best way to promote economic growth and innovation. Regulation of the private sector generally is seen as stifling and counterproductive, as much...

Part 2. Views from the Trenches: Patients and Providers

4. A Physician’s View from the Trenches

A sixty-two-year-old dredging foreman with long-standing hypertension develops intense lower abdominal pain and fever. He describes the pain as the worst he has ever experienced. In the third day of his illness, he comes to my office, where examination confirms a distended, very tender abdomen with diminished bowel sounds.He is febrile and his white blood count is...

5. A Consumer Advocate’s View from the Trenches

Consumer concerns about health-care quality certainly predate the rise of managed care. In the days when indemnity insurance was dominant, consumers faced quality threats from overutilization, particularly the provision of unnecessary and inappropriate services. The lack of care coordination created confusion, allowed for duplication, and meant that in many instances no one...

6. Oversight of Managed Care: An Academic Health Center Perspective

Academic centers’ clinical programs have traditionally been organized
around the provision of high-tech, specialty, and inpatient tertiary services
(Sinaiko 1996). Special services more likely to be found in a teaching hospital
include advanced cardiac care, care of AIDS patients, cancer research and treatment,
trauma care, transplants, geriatrics, and specialized intensive care units...

Part 3. Purchasers and Market Oversight

7. Markets for Medicine?

The introduction of economic incentives in the provision of health-care services
through the use of managed care has generated a substantial amount of
controversy, in part because of a proliferation of anecdotes alleging systematic
underprovision of care. Judging from the debate in the public press, it might
appear that, in moving from fee-for-service arrangements to managed care, we...

8. General Motors as Purchaser

The health industry has been under intense pressure to provide high-quality care at low cost.1 As is evident from other chapters, opinions vary as to how to best accomplish this goal. Changes may be facilitated through regulatory control, competition in the marketplace, and other factors. Thus, different approaches to managed care have been proposed in the public and private...

9. Medicaid: The Prudent Purchaser

In health care, the prudent purchaser is not just the consumer. The prudent purchaser must also be the organization (employer or government agency) that makes buying decisions on behalf of the consumer—whether the consumer is an employee or beneficiary. The purchaser’s objective should be to obtain value. The best value is the best combination of quality and cost. In...

10. NCQA: Using Market Pressure to Promote Quality in Managed Care

Twenty years ago, health maintenance organizations were still more of an idea than an industry. They were isolated efforts to care for Americans by maintaining health through a focus on disease prevention and health promotion.Today, managed care is the norm, with more than 80 million privately insured enrollees in HMOs and tens of millions more enrolled in other managed-care...

11. The American Association of Health Plans: Representing the Industry

This chapter provides an overview of how two types of health plans—health maintenance organizations and preferred provider organizations—are regulated. It examines a broad range of regulation, including traditional regulation (such as state licensure requirements and Medicare program participation requirements) as well as private accreditation requirements and separate...

Part 4. The Role of Regulation and Litigation

12. The Role of State Insurance Regulators

States have been involved in regulating managed-care plans since their inception. Blue Cross Blue Shield Plans, which were arguably the first PPO plans, became subject to state insurance regulation soon after their creation. In the 1970s, as HMOs became more common, some states required them to be licensed as health facilities or agencies under statutes that also regulated them as...

13. The Role of Private Litigation in Monitoring Managed Care

During the past decade, health-care delivery has been evolving away from a system in which individual physicians provide care for individual patients toward a system characterized by large patient populations within integrated delivery systems. Perhaps the most dominant social force behind this transformation has been the need to contain the rising cost of delivering health-care services....

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